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Asia

Conservative think tank ranks Hong Kong highest for economic freedom

Every year, the Heritage Foundation, a leading conservative think tank in the US, compiles an Index of Economic Freedom. Europe and the US are not very highly ranked this year, whereas Asia is generally doing very well.

Hong Kong is popular with foreign business travellers

For 17 years now, Hong Kong has had the freest economy in the world, according to the conservative analysts at the Washington-based Heritage Foundation and the Wall St Journal. The same is true this year.

Ronald Arculli, the chairman of the Hong Kong Stock Exchange, is surely not surprised about this year’s result. "Investors can also benefit from the assurance that platforms through which they are investing uphold standards like fairness, transparency, efficiency, orderly markets and the like," he recently said at the Foreign Correspondents' Club in Hong Kong.

The head of the Hong Kong Stock Exchange says efficiency and orderly markets are beneficial to investors

"We have an amazingly active financial media, both print and electronic, both English and Chinese, and I’m proud to say that we’re probably the only major international financial center that functions in two languages."

Top for fiscal, investment and trade freedom

One of these media outlets is the South China Morning Post, which has a daily trademark business section. Editor-in-chief Reginald Chou points out that Hong Kong that the print media "go out of their way to ensure there is freedom of press. Even the people who don’t speak highly of freedom of the press appreciate that there is a flow of information here."

Out of 179 countries and regions, Hong Kong ranks first in fiscal freedom, property rights and investment freedom, according to the Heritage Foundation study. It also comes top in trade freedom.

"If you look at Hong Kong’s convention and exhibition facilities, they are world-class," explains Winchell Cheung, Europe expert at Hong Kong Trade Development Council. "Hong Kong is right in the center of Asia and it is a preferred location for business travelers."

Singapore is catching up

However, Singapore is catching up and the study says this is because there is less state interference and less corruption. The Hong Kong South China Morning Post has been asking itself how long Hong Kong can stay in the lead, considering the planned competition law and minimum wage. The increased economic cooperation between mainland China and the Special Administrative Region of Hong Kong has also raised concern.

Some analysts think Singapore could soon take over from Hong Kong because there is less corruption

Sven Liu, who works for Muenchner Rueck in Hong Kong, explains that there is a difference between mentalities on mainland China and in Hong Kong.

"The Hong Kong Chinese have a goal and work really professionally," he says. "Maybe they earn less money in the end but they want to do their best. Whereas the mainland Chinese focus more on the short-term and want to know how much they can earn a year. The Hong Kong Chinese already have wealth, although the gap between the rich and the poor is of course very big."